Pertamina to focus on its core business

Pertamina to focus on its core business

JAKARTA (JP): The state-owned oil and gas company Pertamina
stated it would no longer inject equity funds into its
subsidiaries so that it could focus on its core business.

"We have stopped injecting capital into them (the company's
subsidiaries). We have decided not to develop them any longer so
that they can develop themselves," Pertamina director for general
affairs Baharuddin said in a hearing with the House of
Representatives Commission V for manpower and trade.

Baharuddin said Pertamina planned to "abandon" its
subsidiaries not involved in Pertamina's core business.

He did not specify if Pertamina would liquidate or sell the
companies in the future.

"We want to concentrate on our core business," he said.

Pertamina's subsidiaries which are not involved in the oil and
gas business include PT Elnusa, active in telecommunications-
related services; PT Pertamina Tongkang, involved in sea
transportation services; PT Patra Dok Dumai, which operates the
Dumai dockyard in Riau; air carrier PT Pelita Air Service; PT
Patra Jasa, active in the hotel industry; and PT Patra Tani,
involved in the agricultural industry.

Pertamina had liquidated its nonperforming subsidiary Patra
Tani due to its years of loss. But he said Pertamina would still
financially assist two other companies in the red -- Pelita Air
Service and Patra Dok Dumai.

Pelita is expected to suffer a loss of Rp 15 billion (US$3.8
million) this year, while Dok Dumai's loss is estimated to reach
Rp 2 billion.

Pertamina would lend both companies Rp 20 billion to pay their
debts.

Baharuddin expected both companies would be able to earn
profits or at least self finance their operations next year. He
did not specify Pertamina's plan if both companies still suffered
losses.

Pertamina's subsidiaries which are expected to book profits
this year include El Nusa with an estimated after-tax profit of
Rp 23.6 billion, Patrajasa with a Rp 6.9 billion profit and
Pertamina Tongkang with a Rp 8.9 billion profit.

Baharuddin also said Pertamina had stopped injecting funds
into its hospitals across the country over the past three years
and planned to set up a company called PT Rumah Sakit Pertamina
to manage all the hospitals.

Pertamina finance director Soegianto told the commission the
company's consolidated assets reached Rp 33.2 trillion in the
1996/1997 fiscal year ending on March 31.

He said Pertamina's total debts reached Rp 15.3 trillion in
the same period, comprising of Rp 6.6 trillion in short-term
debts and Rp 8.7 trillion in long-term debts.

He said the rupiah's sharp depreciation against the U.S.
dollar did not affect the company's ability to service its debt
in dollars because the company made debt payments with its export
revenues. (jsk)